Abstract:
When a major export market closes, where do the displaced goods go? This paper examines country-level trade deflections during trade shocks using UN Comtrade commodity flows at the HS4 level for 2014-2024. Five case studies - China's plasticwaste import ban, anti-dumping duties imposed by the Republic of Korea on Japanese printing paper, United States measures on Chinese washing machines and solar panels, and Chinese retaliation against United States soybeans, complemented by a Moroccan refrigerator case - trace how export flows adjust when access to a key market is lost. Five overlapping mechanisms are identified: trade depletion, deflection to existing partners, deflection to new markets, rerouting through third countries, and production reallocation. Which mechanism dominates depends on pre-existing trade intensity, regulatory asymmetries, FDI linkages and partner absorptive capacity, and initial deflection destinations frequently attract follow-up restrictions that trigger secondary deflections. Building on these regularities, the paper derives seven testable hypotheses and outlines two ex-ante framework ideas - a decision tree suited to policy communication and an adjustment-channel map suited to econometric operationalisation - as first steps toward anticipating adjustment paths under future shocks.
